Magma v01 i06


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Magma v01 i06

  1. 1. Volume 1, Issue 6 MAGMA MAGazine of MArketing A SIMSREE Marketing Forum inititative Cover story Special Coverage CROWDSOURCING Green Marketing Green EnergySydenham Institute of Management Studies, Research and Entrepreneurship Education
  2. 2. CROWDSOURCING By Chandan Patekar, SIMSREE 2011-13 ( Marketing )The marvels of technology and the shrinking of distances have unleashed the power of crowdsourcing.Crowdsourcing is a term that was coined back in 2006 by writer Jeff Howe for a Wired magazine article.‘Crowdsourcing is the act of sending out tasks that are normally performed by an individual to a groupof people.’ The idea is that more minds and hands are better than one and that collaboration createsinnovation. It dramatically reduces costs, cycle time and unleashes creativity. “Crowdsourcing has virtually overnight generated huge buzz, enthusi- asm, and fear. Its the application of the open-source idea to any field outside of software, taking a function performed by people in an or- ganization, such as reporting done by journalist, research and product development by scientists, or design of a T-shirt, for example, and in effect outsourcing it through an open-air broadcast on the Internet. Crowdsourcing has already had a huge impact on large corporations such as Proctor & Gamble.” Crowdsourcing: Why the Power of the Crowd is Driving the Future of Business by Jeff Howe. Crowdsourcing is profoundly impacting nations. We have seen how collaboration using social media, mobile technologies and the internet converted sparks of muted dissent into revolt in Ar- ab countries called The Arab Springs. Iceland has decided to change the original constitution based on suggestions posted by its 320,000 citizens via Facebook, Twitter and YouTube. By the same token, the Lokpal Bill was caught in the web of high deci- bels, political overtones, hunger strikes and media frenzy. How about using a crowdsourcing approach to the issue? The aam admi—the real citizens- and not just their self-appointed spokes- persons could participate in shaping the law through crowdsourcing? The “crowd” could include constitutional ex- perts, students of law and ordinary citizens who have a smart idea. Of course the parliament will pass the bill into legislation.
  3. 3. How is this altering the business landscape? Business, whether global or local, large or small can no longerignore the potential or power of crowdsourcing. The objective of collaboration can be to co-create a prod-uct or service with designers, customers and marketing people working together using an easily accessi-ble, open platform. In essence, crowdsourcing will tap into a world of ideas and creations. You“outsource” to a diverse crowd. You may not even know who may be part of this “crowd” and you maynot have any connection or prior relationship with some of the key participants. Using crowdsourcingbrings some genuine advantages to companies and individuals looking to complete defined tasks withaffordable price. The main attraction so far has been its fairly lower price, compared to the price for hiringa dedicated professional. Also the best thing with the low price is the high number of people who areready to work for you anytime.Not long ago, a blog post on the Harvard Business Review (HBR) website challenged the readers acrossthe globe to design a house that can be con-structed for less than $300. With partnersJovoto, a crowd-sourcing forum for spon-sored design competitions, and US$25,000prize money underwritten by the interna-tional industrial firm Ingersoll Rand, the blogpost resulted in a challenge to bring afforda-ble housing to the worlds poor. The globalaward was won by an Indian company:Mahindra Partners. It started with brain-storming sessions amongst a diverse groupranging from structural experts, clean-techprofessionals and technologists. It culminat-ed into investment of personal time andeffort towards designing a low-skill and low-cost solution. The design that finally emerged as a winner in-corporates materials which are abundantly available in local markets and utilizes low-technology inputsand simple design that can be built easily at low-cost.“In this country we need both economical innovation and crowdsourcing. When resourcesare scarce, creativity must be both boundless and borderless.”
  4. 4. Let us take a look at an Indian case of crowdsourcing. Three Goan entrepreneurs have started acrowdsourcing application called Foodlets ( ) . Foodlets posts and shares pictures offood from restaurant menus. Foodlets is an exciting new way for people to discover good food and con-nect with foodies. It is based on the core concepts of content co-creation and sharing. People can createfoodlets and share with friends, they can affirm the food they have eaten and loved, and tell their experi-ences about a particular dish. Alternatively restaurant owners can create visual menus and engage withtheir patrons Tourists can now see more than a 1000 dishes from some of the best restaurants in Goa be-fore planning their next holiday. These include local specialties such as Chicken Cafreal, Squid Calamari,Bebinca, Xacuti, Sorpotel and Pork Vindaloo.Foodlets’ basic service is free of cost – restaurants can create their own profile pages and foodlets of thedishes they serve. They also provide a premium paid service, where they create the restaurant profilepage, assign a professional photographer to take pictures of the food and create foodlets with all details.Additionally, the restaurant and its food are promoted on Facebook and Twitter because that’s where thepeople are.As with all things, there are disadvantages, and interestingly the main disadvantage mirrors the main ad-vantage: cheap labor results less credible product, compared to professionals. You pay professionals fortheir expertise, experience and dedicated spirit, but you buy labor for completing simple tasks. Any taskconsidered above simple is risky for crowdsourcing. With the crowdsourcing also comes the issue of man-agement. In most cases you have to manage a large scale of workers, which pretty much waste more ofyour time for management instead of solution. Besides, it’s difficult for collaboration between crowdmembers as they compete with each other in nature. Worst of all, there’s no contract in mostcrowdsourcing cases. Workers can run anytime they want, and your design might be reused by anyone.But the power and potential of crowdsourcing is too large for companies to ignore. Therefore many com-panies are looking towards contractual agreements, limited liability agreements, NDAs, modularcrowdsourcing and other techniques to resolve many of these issues. Moreover it is never a good idea tocrowd source your core business process, only initial seeding and data/insight gathering stages. END
  5. 5. NEWS iPhone 5 On September 12, Apple CEO Tim Cook, launched the iPhone 5, touted as the thinnest and lightest iPhone ever. It features a completely redesigned 4- inch display, a faster A6 processor and a 8 megapix- el iSight camera. Philip Schiller, senior VP of world- wide marketing said that “iPhone 5 is the most beautiful consumer device we have ever created” allowed in Retail, AviationIn what is being touted as the boldest reforms yet inprime minister Manmohan Singh’s government, onFriday, 14th September, the cabinet has thrownopen the gates for foreign chains to enter the Indiansupermarket sector. By allowing 51% FDI in multi-brand retail, this move allows global giants likeWalMart to setup shop in India and sell directly toconsumers for the first time. The cabinet has alsoallowed 49% FDI in the aviation industry. Thesemoves will undoubtedly help the cash-deprived air-line carriers.
  6. 6. Green MarketingBy Pranav KoliSIMSREE 2011-13, MarketingMember of Marketing ForumThe American Marketing Association defines green marketing as “the marketing of productsthat are presumed environmentally safe”. It includes a broad range of activities, includingproduct modification, changes to the production process, packaging changes, as well as modi-fying advertising.However, this definition does not do the term justice. Green marketing ( or EnvironmentalMarketing or Ecological Marketing as it is also called ) does not just include the marketing ofgreen products, but also suiting your marketing methodologies and strategies so that theythemselves are more environment friendly.Let us attempt to understand this with the help of our tried and tested : 7 P’s of marketingProductIt all begins with the product. First of all you have to ensure thatyour product is environment friendly.You have to pay special attention to things like manufacturing pro-cesses, packaging, waste management, sources of energy and othersto achieve this.Some of the major considerations are : What is the impact of production, sourcing of materials and packaging on the environment? Can minimum levels of packaging and environment friendly packaging be achieved without compromising product quality or appeal? Are your suppliers at least as environmentally friendly as you?
  7. 7. Price Employing green manufacturing techniques might lead to increases or decreases in the cost of production. In many cases the initial high in- vestments will be off set in the longer run by lower fuel bills through energy efficiency measures or an increase in sales caused by a positive product image. An organization might be able to pass the increase in production costs to its customers, but this would depend on various factors such as the level of increase, type of consumer, competitorprices and the strength of the economy.PlaceOrganizations need to carefully plan their distribution centers,distribution timings, distribution strategies to ensure that theyhave minimum impact on the environment.The fastest mode of transportation might be damaging to the environment ( e.g. AirPlanes ), aenvironmentally friendly mode of transportation might not be fast enough to meet your needs( e.g. Canals ), a method of distribution that combines speed with “environmentally friendli-ness” may increase distribution costs ( e.g. Electric Vehicles ). You have to ensure that youstrike a proper balance between the three People Your employees are the face of your organization. They must not behave in a manner which would conflict with your organization’s image as a green company. You should encourage your employees to use environmentally friendly methods of transportations while commuting to their offic- es like mass transit systems, hybrid vehicles, carpooling etc. For example. Google offers incentives to its employees who opt-in to buy hybrid vehicles. One other example is the increasing use of teleconferencing to replace frequent travel.
  8. 8. ProcessProcesses are referred to the systems that enablean organization to effectively deliver its goods andservices. They refer to the activities that your or-ganization performs which are not the core activi-ties of your company. It is very important to incor-porate environmentally friendly processes in theday-to-day activities of your organization to con-vey to world that you take the environment seri-ously. Croma, the electronics retail chain by TATAhas recently started allowing customers to opt-infor an eReceipt. IRCTC has allowed customers tocarry digital copies of their reservation receipts. Physical Evidence Much of what your organization does to incor- porate green practices is back-end oriented, many times it is intangible. Therefore it be- comes very important to let your customer know the steps you have taken to ensure the future of the planet. Many a times, this is as simple as letting your customer know why cer- tain things are done the way they are done. E.g. To preserve water many hotels wash towels, bed sheets, etc, only when you explicitly ask them to do so. Some customers might believe that this has been done by the hotel only to save some money. In this case it becomes im- portant to convey the thinking the behind your actions to your clients. This is done by placing agreen card in hotel rooms ( as shown alongside ) which conveys this to the customers.
  9. 9. PromotionNow that you have ensured that your product and your mar-keting is environmentally friendly, it is very important to conveythat to your customers. Some of the above pictures / logos arean internationally and instantly recognized signs of a greenproduct. Incorporating these on your product packaging and onyour communication is an instant signal to your audience thatyour product is environment friendly.At the same time, its is also very important to ensure that yourpromotion strategy itself is environment friendly. Example : If you cannot completely avoid using pamphlets to promote your products, you can at- least ensure that they are printed on recycled paper Employ environmental friendly methods when filming your advertisement films Avoid use of paper as much as possible, dont ask users to fill in unnecessary forms, try and utilize the internet as a medium as much as possible If you are using outdoor mobile advertisements, ensure that the vehicles you use are en- vironment friendly Make extensive use of mobile advertising, online advertising, social media marketing and other such means of marketing which would reduce the impact on the environment as compared to using newspapers, television ad spots, etc;
  10. 10. Roadblocks High Initial Costs The initial investment in going green is quite high. Not just in terms of money being invested, but in terms of huge R&D involved in fig- uring out newer, better and environment friendly methods of man-ufacturing, packaging, etc; a huge change in the operating of the company itself , changing ofthe company’s corporate structure, time lag required to get your company onto the greentrack.Going green as a CSR initiativeMany companies undertake green marketing strategies as part of their CSR activities. However,every company should realize that going green is not just a CSR activity but something thatshould be incorporated in the corporate structure of the company itself.Customers not readyIn a recent study published by MeidaPost, much of the American customers think that greenmarketing is nothing more than a marketing ploy. This mindset has be changed with effectivecommunication.Green WashingGreen washing is a form of spin in which green PR or green marketing is deceptively used topromote the perception that an organizations aims and policies are environmentally friendly,when they might not really be so. Whether it is to increase profits or gain political support,greenwashing may be used to manipulate popular opinion to support otherwise questionableaims. ( more at )The Road AheadWhy should a company go green ? Well, because it’s the right thing to do. And in the longterm, you might not really have any other option. Costs of traditional fuels is skyrocketing day-by-day. The rate at which the environment is deteriorating is alarming, this is causing even themost arrogant governments to take notice. And many countries are passing laws which are in-centivizing or even forcing companies to adapt green practices in their business. Eventuallyevery company will be required to conduct business in an environmentally responsible way.So why not do the right thing now instead of waiting? Why not keep up with the competition—maybe even beat them to the punch—by becoming the company that owns green in your cate-gory?And if you think the economy will keep customers from paying more for an environmentallyresponsible product or service, think again. A recent survey has shown that 82% of consumersare still purchasing green products during the recession. END
  11. 11. Green Energy By Prathmesh Limaye SIMSREE 2011-13, FinanceAs you try to incorporate more and more environment friendly techniques in the manufactureof your product and in your marketing strategies, your initial costs shoot up drastically. Themajor off-set for this steep rise in the long term is the savings you do by moving away fromconventional fuel and energy sources. Let us take a look at how employing various green ener-gy techniques, specifically solar electricity panels can help you achieve just that.Mumbai, India’s commercial capital runs on the electrical power from utility companies such asMaharashtra State Electricity Distribution Corporation Limited (MSEDCL), Reliance and TataPower. The office spaces that are categorized as commercial consumers attract commercialpower tariff at a rate much higher than the industrial or residential rates.The commercial rates have a two part tariff structure. One component based on the power de-mand, attracts a fixed charge. The second thevariable component, is more expensive and de-pends on the energy consumption of the prem-ises, specially during daytime.Commercial consumers find that their energybills’ variable component becomes high particu-larly during summer months and around mid-day on account of more usage air conditioningwhen a higher outside temperature requiresmore power for maintaining a comfortabletemperature inside the building. Some con-sumers say that air conditioning system accounts for as much as 75% of their total consump-tion during summer months.
  12. 12. In 2001, the variable charge was around Rs.3.31 per unit (KWh). In 2012, it is around Rs.11.75per unit (KWh). It has seen many increases in the last few years rising by more than 250% be-tween these periods (See Graph). The increases were due to the levying of Electricity duty(from 6% to 17 %,), introduction of a tax on sale (at a rate of Rs 0.08 per unit) and introductionof fuel surcharge. Some utility companies even ask for a reliability charge on electricity to con-sumers. If the past rate increase is any indication of the future expenses for using electricity, itis time commercial consumers think about consuming electricity smartly.Fortunately, to counter the variable cost challenge, they have a choice. They can now install agrid interactive solar photovoltaic (SPV) system on their properties’ roof tops. These days a 1KWp SPV system comes for about Rs.1.5L. The advantage of using this system is that the powergenerated is consumed immediately without the need of having to storing it in a bank ofbatteries. The buildings run on a duel power system permitting parallel consumption of powerfrom the utility companies’ when the solar power falls short or is not generated.The Government of India provides an accelerated depreciation on such installations in additionto a subsidy. A good solar photovoltaic system could generate about 5 units (KWh) per dayfrom a 1 KWp system giving some relief to commercial consumers from the costly grid power.It is time corporate houses think about installing a roof top SPV system and going for the greenenergy. Those with clear sunshine, roof top area and capacity to spare some capital will notonly reduce their power bill but also enhance their public image by generating solar power agreen renewable source of energy.Many companies are having their warehouses with air conditioning system in Maharashtra es-pecially the pharmaceutical companies and paying commercial tariff and the above case is alsoapplicable to them and they can also avail the benefit of nature by going solar photovoltaic en-ergy generation system on the roof top of the warehouses. END
  13. 13. Maggi 2 Minute Mein KhushiyaaMaggi , which created the noodles category in India has now none other than Amitabh Bachchan as itsbrand ambassador. The brand is being endorsed by a celebrity for the first time in its history. And Big Bis an intriguing choice for a brand which is most patronized by young children.Maggi holds a commanding position in the Noodles Segment with over 60% market share. Off late, thebrand is facing competition from brands like Horlicks, TopRamen Sunfeast Yippie etc. And further thebrand is feeling a disconnect with the new generation customers who now have more choices for indul-gence other than noodles. Maggi now faces not only brand competition but also industry competitionfrom similar products like Pizzas. Even fast food joints are taking away consumers from the brand. Atthis point , the brand needs to stay relevant to the consumers since consumers have a wider choice ofindulgence.Maggis choice of Big B as the brand ambassador is little puzzling. Amitabh Bachchan as a celebrity com-mands immense respect among the audiences. He is an amazing story teller and has unmatched screenpresence and Maggi wants to build more authenticity through his endorsement. The new campaign fea-turing Big B is an extension of the highly successful Me and Meri Maggi theme where the brand tried tocrowdsource stories of customer experi-ence with Maggi.The campaign brought back many seg-ments of consumers who moved awayfrom the brand since they have grown up.The brand again brought back focus onitself and its heritage and the USP of 2minutes. The campaign in a way was thecounter strike against the competitorsfocus on health and nutrition.Big B was introduced as a story teller whonarrates the various stories supplied by the consumers through the various touchpoints created by thebrand. The brand is running a campaign featuring this stories.View the complete advertisement at :
  14. 14. Volume 1, Issue 6The ads focus on the ease of cooking ( convenience) and the happiness thereby attempting to take theconsumers focus away from the health platform adopted by Horlicks, Sunfeast Yippie etc. Sunfeast hasroped in Saina Nehwal as its endorser.The brand has a new slogan " 2 minute mein Khushiyan " . It is interesting to note that the brand hasbrought back the 2 minutes proposition after a long time.Although Amitabh Bachchan is a master story teller, I find some how a disconnect between the brandand the celebrity. The thought is that " he is not the right person to endorse the brand". This is despitethe fact that he commands respect from across age groups.Having said that the presence of the powerful celebrity along with the smart collection of real life sto-ries of brand consumption adds a big boost to this brand. The brand exactly needs such a boost at thispoint of its life cycle. The problem with such heritage brand is that over the period of time, the commu-nication becomes boring. Booster shots like these will again revive the energy levels for the brand tomove and face competition head on. ENDOriginal Article by Harish B, posted on Marketing Practice blog at recommended by :Devans PatwaaSIMSREE 2011-13, MarketingWe would like to hear from you, send in your feedback, comments, critique tosimsree.Marketing.Forum@gmail.comContributions in form of articles, recommendations or otherwise are always welcome. Sydenham Institute of Management Studies, Research and Entrepreneurship Education